Agenda and minutes

Governance and Audit Committee
Thursday, 30th June, 2016 2.00 pm

Venue: Witham Room - South Kesteven House, St. Peter's Hill, Grantham. NG31 6PZ. View directions

Contact: Jo Toomey 

No. Item




Disclosure of interests


Minutes of the meeting held on 24 March 2016 pdf icon PDF 153 KB



    The minutes of the meeting held on 24 March 2016 were proposed, seconded and agreed as a correct record.


Updates from previous meeting


    At its meeting on 24 March 2016 the Governance and Audit Committee had made recommendations to Council regarding Financial Regulations and the Council’s Contract and Procurement Procedure Rules. The recommendations of the Committee were adopted by the Council at its meeting on 21 April 2016.


    Also at its March meeting, the Committee referred to the Scrutiny Committee the consideration of the decision to offer cost reductions to customers paying for green bin renewals by direct debit together with the performance of the systems and processes used during the renewal period. The Scrutiny Committee had not met since the last meeting of the Governance and Audit Committee however members received confirmation that an item had been added to the agenda for the meeting to be held on 12 July 2016 to scope the work.


Internal Audit: Annual Report and Opinion 2015/2016 pdf icon PDF 274 KB

    Internal Audit annual report 2015/2016





    The Committee noted the contents of the Internal Audit Annual Report 2015/16


    Chris Williams from RSM presented the Internal Audit Annual Report 2015/16. Under the Public Sector Internal Audit Standards, the Head of Internal Audit was required to provide an annual opinion on the overall adequacy and effectiveness of the Council’s risk management, control and governance processes. The opinion, which was detailed within the RSM report found that the Council had an adequate and effective framework of internal control, however internal audit work had identified further enhancements to the framework to ensure that it remained adequate and effective. Mr Williams proceeded to explain that RSM was comfortable with the responses provided to Internal Audit recommendations by management and drew members’ attention to the key performance indicators listed in the report, adding that RSM was satisfied with performance against those indicators.


    Discussion ensued around the key performance indicator where the target had not been met; instead of receiving management responses within 10 days of the issuing of a draft report, an actual figure of 12.5 days had been recorded. Members were reassured that the figure had not raised RSM’s concern; a majority of management responses were received within the 10 day time frame and it was noted that it was possible that it was possible for the response to one report could skew that overall figure.


    It was noted that the last external quality assessment of the work carried out by RSM was undertaken in 2011. Members sought assurance that as re-assessment was required on a 5-yearly basis, arrangements were in place to deliver the review during 2016. The assessment had been commissioned to be undertaken during the second half of the year and the report detailing the outcome of the assessment would be shared with RSM’s clients. While members noted that the report would be sent to officers, it was requested and agreed that it would also be shared with the Committee.


    Members were reminded of the Committee’s considerations when the outcome was reported of the audit of partnerships, notably the definitions of those organisations defined as partners within the scope of the audit and the distinction between partners and contractors. Recognition was made of changes to the level of resources available to the district council and the need to understand the effectiveness of the partners with which the authority was working, ensuring that appropriate measures were put into place to ensure the council was optimising the outcomes of partnership working including achieving value for money. It was agreed that information arising from the audit of partnerships together with the minutes that summarised the discussion during the meeting at which it was discussed would be circulated to members of the Committee to enable them to reflect and ensure any future scoping covered those areas to avoid ambiguity in audits going forward.


    A question was raised about the process for following up the recommendations that had been raised by Internal Audit. RSM automatically followed-up medium and high risk recommendations in  ...  view the full minutes text for item 5.


Internal Audit Follow-up Report pdf icon PDF 57 KB

    Report number CFM375 by the Corporate Finance Manager.


    Additional documents:




    The Committee approves the contents of the Internal Audit follow-up report attached to covering report CFM375.


    Chris Williams from RSM presented the Internal Audit follow-up report produced by RSM, which was attached to report number CFM375 of the Corporate Finance Manager. The report was the first of three follow-up reports that would be completed as part of the 2016/17 audit plan and tracked progress of the implementation of medium and high risk recommendations raised by Internal Audit.


    Members noted that of the 12 medium-risk recommendations followed-up, 7 had been fully implemented, 4 were in the process of being implemented and one had not been implemented, which resulted in an opinion that reasonable progress had been made. Members queried the thresholds that provided the benchmark for the opinion given by Internal Audit, noting that an opinion of reasonable progress could be achieved by implementing only 50% of Audit recommendations. Mr. Williams provided the Committee with assurance that both good and reasonable opinions were positive and that RSM was comfortable about the progress made in implementing its recommendations


    Discussion then turned to those recommendations that had been raised and remained outstanding. Those actions that remained outstanding related to tenancy management, where implementation had not been commenced and Section 106 Agreements, building control, aids and adaptations and waste and recycling – inventory and stock, where implementation was underway. Members noted the revised implementation dates and officers agreed to follow up the progress of those outstanding actions. Updates would be forwarded via e-mail to members of the Committee as to whether the actions had been completed by the prescribed deadline. Where an action had not been completed by the revised date, the appropriate Executive or Business Manager would be asked to provide an explanation for Committee members.


    Members asked whether there would be an impact on the level of assurance given by Internal Audit or the priority assigned to the recommendation if implementation extended beyond the revised deadline date. An explanation was given that the opinion was based on the original risk but if Internal Audit felt that a deadline had been unreasonably extended, the Committee would be advised.


    A proposition was made to approve the Internal Audit follow-up report which was attached to report number CFM375; this was seconded and, on being put to the vote, approved.


Draft Financial Outturn 2015/16 pdf icon PDF 144 KB

    Report number CFM373 by the Corporate Finance Manager.



    Additional documents:




    Having reviewed the contents of report number CFM373, the Governance and Audit Committee:


    1.    Approves the Revenue and Capital Outturn report and associated appendices for 2015/16 including the movements of reserves


    2.    Approves the establishment of the 2015/16 set-asides as detailed in the report


    3.    Approves the Capital slippages from the 2015/16 Capital Programme as detailed in the report


    4.    Notes the commentary to the outturn report, raising no issues of which it would like to make the Executive aware in relation to the Council’s medium term financial planning arrangements


    Report number CFM373 of the Strategic Director and Corporate Finance Manager presented the Council’s Revenue and Capital outturn for 2015/16 for both the General Fund and Housing Revenue Account (HRA). It provided commentary both on the outturn position for the General Fund and Housing Revenue Account and on the reserves statement, including a review of reserves. The report also asked members to consider set-asides proposed in the report, Capital slippages from the 2015/16 Capital Programme and to make any recommendations to the Executive it felt appropriate in relation to the Council’s medium term financial planning arrangements.


    Members began by discussing slippage against the Capital Programme. A majority of the slippage in the General Fund Capital Programme was a result of slippage with the cinema project. While the anticipated spend had not been completed within the financial year, the ambition for the project remained so the budget had been re-profiled to match the new anticipated timetable for project delivery. A majority of the slippage related to a single new-build scheme which had required significant revision following public consultation. Slippage against other HRA projects was small and members noted that the variance attached to a number of those projects was not the result of slippage but delivering them under budget. Members asked whether those projects that had experienced slippage were being funded with borrowed monies and if so, whether the delays opened the authority to increased risk; officers stated the projects that had experienced slippage were not being funded through borrowing.


    Members of the Committee were interested in the impact of slippage in spending ICT infrastructure budget of £144k. £28K of the slippage related to investment in a new Customer Relationship Management (CRM) system, which would provide a single view of the customer across the authority. It also supported the organisation’s channel shift aspirations. Members were advised that information regarding the rollout of the new CRM was provided in the ICT Strategy. Assurance was given that while there had been slippage, the Council had a working CRM system and that elements of the new system had been implemented, adding that neither service delivery nor customer interaction would be affected.


    A question was raised about the removal of accounting adjustments that was included in the table that showed General Fund (Revenue) Variance Analysis. Officers explained that this represented Capital expenditure that was charged straight to Revenue because it was non-enhancing to the property. It was an audit requirement that, as the expenditure  ...  view the full minutes text for item 7.


Risk Management and Business Continuity Annual Report including Corporate Risk Register pdf icon PDF 75 KB

    Report number CFM374 by the Corporate Finance Manager. 


    Additional documents:




    That the Governance and Audit Committee approves the risk management annual report 2015/16.


    The Corporate Finance Manager presented report number CFM374, which was the risk management annual report for 2015/16. Members were reminded that risk management was a key part of the Committee’s terms of reference and that at its meeting in September 2015, the Committee approved a new framework for risk management.


    RSM, as the council’s Internal Audit provider carried out an annual review of risk management arrangements, the most recent of which resulted in an opinion of substantial assurance. Officers explained that there were also a number of internal mechanisms through which risk was managed and summarised the process through which risk was reviewed. The Council had a risk management group that discussed business risks, shared good practice, received updates on the Internal Audit Plan and monitored slippage against any actions including the reasons for that slippage. This information was also presented to the authority’s Senior Management Team on a 6-weekly basis.


    The corporate risk register had been fundamentally reviewed in March 2016 to make it more strategic and far-reaching, so that it was sufficiently flexible to ensure it would still be fit for purpose as the different ways in which the Council worked diversified. The review also provided the opportunity to re-present and reposition risks and come up with new actions. The register was monitored in accordance with those dates allocated to actions; progress against these actions would be reported back to the Committee on a regular basis.


    Report number CFM374 also gave a brief update on business continuity activity. Most recently, scenario planning had been undertaken to test the Council’s response should it suffer a cyber attack similar to that experienced by Lincolnshire County Council or a fire of the type experienced by South Oxfordshire Council.


    Early discussion concentrated on contingency plans and recovery plans for key locations and systems. Members stated that they were encouraged to see a premises relocation plan but questioned whether sufficient IT hardware was in place to operate from alternative sites. Approximately 30 terminals were available at the Bourne Community Access Point and additional computer equipment was available at the Meres Leisure Centre. Whilst there was insufficient equipment to support relocation of all services, there was sufficient to ensure the continuity of key services (customer-focussed services including customer services, housing, homelessness, etc.).


    Discussion turned to risks associated with partners and the potential impact of the Referendum that saw Britain voting to leave the European Union. Particular concern was expressed about the ability of partners to deliver should changes in the labour force ensue, creating skills gaps. It was acknowledged that the decision to exit the European Union was a new, general, risk that would need to be considered and appropriate mitigation put in place.


    Members considered the authority’s appetite for risk and how it was reviewed. An explanation was given of how this was done both through the regular refreshing of the risk register and the assessment of potential risks  ...  view the full minutes text for item 8.


Any other business, which the chairman, by reasons of special circumstances, decides is urgent.


    The Committee requested that a vote of thanks be recorded for the work of Councillor Ian Stokes during his tenure as Chairman of the Governance and Audit Committee. In proposing the vote of thanks, the achievements of the Committee were attributed to Councillor Stokes’ leadership.


Close of meeting